When you are struggling to take your business to the next level, you might be missing the necessary cash injection that is needed to improve your profitability, services, and customer offerings. Raising cash in a business with a tight budget can be challenging. You must have used up all your savings when you went out on your own, and now you don’t know where to reach out. The good news is that improving your business is one of the best investments you can make, and it delivers long term high returns, if done right.
If you are struggling with finding the money to transform your business, find a few ways you can try before you give up below.
1. Equity Release from Properties
If you own your home or business premises, you can release the equity you have on it. The equity will be the positive balance between the purchase price and the current price. The more you have already paid off the real estate the better chance you will have to get this deal approved by the bank. You will be free to use the money for anything you wish to: renovation, marketing, or employing and training new staff. This low-risk way of raising business funds is popular among established businesses.
2. Compensation Claims
If you have ever suffered an accident or had an injury caused by a third party without seeking legal advice, it might be time to claim what you are entitled to. Whether it was an industrial accident or an environmental impact that affected your health, you can still claim compensation. If you ever worked abroad, you can contact a lawyer to represent you Defense Base Act case and get you the money you deserve for the physical or mental illness caused by an employer.
3. Business Premises
If your business premises are too big for you, you can either move to a smaller one to use the money left over for improving your business processes, or rent, sell a part of your existing building. You are likely to find companies looking for the size you have to offer if you get in touch with a commercial real estate agency. You might need to initially spend a bit of money to refurbish the part of the building and make it suitable for the next company, but overall you can get yourself some extra money to invest in your own venture.
4. Intellectual Property
It is also important to look through your intellectual property created during the years in business to see if you can make money of it. Repackaging and selling your software or checking whether or not one of your competitors used your copyrighted material without permission, and submitting a claim can all work to your advantage. Make sure that whatever you invent or develop is protected by copyright law, so you can make money off your creativity over and over again.
5. Personal Pension
If you are absolutely sure that you will be able to increase your earning potential when you transform your business, you might touch your personal pension or 401K plan. While you might have this money tucked away for your retirement, if you know for sure that you will get your investment back in a few months or year, this practice is allowed. However, if you are investing in a risky business, never use your savings or pension plan.
6. Look for Angel Investors
If you cannot find the money you need in your business or personal account, and are unable to release funds on your own, but still want to make the improvements, you can search for angel investors who will fund your project for a share of the returns. This will allow you to stay ahead of the competition and increase your earning potential. If you can improve your profits by 30 percent in the next year, you don’t mind sharing the benefits with an angel investor who helped you out when you were stuck.
7. Government Grants
To get funding for research, development, and innovation, you can also search for government funds and loans for small businesses. You might find that you can get enough money on a good term at a low rate, or a non-repayable fund if you can prove that your investment will benefit the community and other companies in your industry. You can apply for industry, state, federal, or local grants. Alternatively, you can make your investment cheaper by getting a tax rebate.
8. Friends and Family
As a last resort, you can also get money from your friends and family members. The general rule of running a business is to keep is separate from your relationships, but it is allowed in some cases. If you can promise some rewards and guarantee that the money will be paid back in a certain time, you can ask your family members and friends for cash. Never accept gifts, and always offer to pay interest on top of the money you borrow for the business. This will show your family members and friends that you are confident in your own success.
9. Selling Your Assets
If times are desperate, and your budget is extremely tight, you might look into selling equipment you no longer use or business vehicles. If you are offering delivery, and your customers generally come and pick up their orders themselves, chances are you would be better off employing a courier service instead of paying for the fuel, maintenance, and tax on the vans.
When you feel like your business needs a cash injection, you will need to get creative to make funds available for innovation. It is important to carry on building a competitive advantage, and when you have limited money to play with, you might be left behind. Look for government funds, try to release funds tied up in savings and property, and use your existing assets to build more value within your business that will take it to the next level, improve its profitability, and reputation.